El Paso may soon be tapping a new water source that could supply around 1 billion additional gallons of drinkable water for the region each year beginning in 2025.
For more than 15 years, the Kay Bailey Hutchison desalination plant near El Paso International Airport – the largest inland desal plant in the world – has been converting tens of millions of gallons of brackish groundwater that’s too salty to drink into potable freshwater.
Now, instead of having to pump the salty brine waste produced by the plant underground, El Paso Water is planning to send the waste to a facility next door that will treat the salty effluent, turn it into drinkable water and sell it back to El Paso’s water utility.
El Paso Water today normally transports the salty waste from the desalination plant 22 miles away to a site where the utility injects it underground. The deal with the new facility – called UWCMC – will save El Paso Water money on waste disposal and wring more out of the area’s salty groundwater.
“The wastewater from the desalination plant is being cleaned up and, basically, recycled,” said Lee McCormick, a municipal advisor for the Mission Economic Development Corporation, which is selling tax-exempt bonds to finance the project.
The project has no impact on El Paso taxpayers, beyond the property taxes the facility will pay if it starts operating.
“There is no economic burden on the city” of El Paso, and the project “won’t affect the city’s bonding capacity or its credit rating,” McCormick said. “It is private dollars into a private project.”
El Paso Water didn’t make any of its employees available for an interview to discuss the partnership. And executives with the principal firm behind the UWCMC facility – a company called Upwell Water – weren’t immediately available to comment on the project.
The deal presents a win-win opportunity for Upwell and El Paso Water. El Paso Water will give brine waste water from the desalination plant at no cost to UWCMC, which will treat it and produce not only potable water but also materials such as gypsum and hydrochloric acid that Upwell can sell to industrial customers.
El Paso Water for years has been trying to find a partner to treat the plant’s brine waste. A previous Houston-based company developed the site starting in 2015 using tens of millions of dollars of debt funding, but was never able to get it up-and-running. A firm called Critical Materials Corporation – a partner of Upwell Water – purchased the facility for between $5 million and $6 million in 2021, the El Paso Times reported at the time.
According to a 2021 document detailing the deal, El Paso Water said it will purchase the treated water back from UWCMC for $2.75 per 1,000 gallons.
At that price, the treated water is relatively expensive for El Paso Water compared to the utility’s other major water sources, but not exorbitant.
Pumping an acre-foot of groundwater – nearly 326,000 gallons of water – costs El Paso Water about $150, while drawing an acre-foot of surface water from the Rio Grande costs around $300. Meanwhile, an acre-foot of desalinated water costs $500, according to El Paso Water.
By comparison, the treated water from UWCMC would cost about $895 per acre-foot. While costlier than the utility’s primary water sources, it’s still far cheaper than piping water in from outside of El Paso, which would cost $3,000 per acre-foot. And the “advanced water purification” process – in which the utility treats wastewater to drinkable standards – that El Paso Water plans to rely more on in the future costs $1,000 per acre-foot, according to the utility’s estimates.
Desalinated water makes up only about five percent of the city’s water supply – two underground aquifers and the Rio Grande usually provide about 95 percent of El Paso’s water in a typical year.
From March through August of this year, El Paso Water sold over 19 billion gallons of water to 255,000 customers, or about 3.2 billion gallons per month. The utility expects to sell 35 billion gallons this fiscal year. So adding 1 billion gallons to the utility’s water supply boosts its total annual supplies by just under 3%.
Upwell is planning to invest $100 million at the plant to make it operational by 2025. The Mission Economic Development Corp. – based in Mission, Texas – is involved to provide so-called “conduit debt.” MEDC is issuing the tax-exempt bonds, and then loaning the proceeds to Upwell to finance the facility’s development.
The MEDC can issue bonds to finance projects in areas across Texas, as long as local leaders in each jurisdiction approve it. El Paso’s City Council last week OK’d the project.
McCormick said there are a few steps left before the project can proceed; the Texas Attorney General’s office still must review documents related to the deal. But he said he expects the UWCMC facility to come to fruition in the years ahead.